This case summary addresses the appeal filed by Hisar Metal Industries Limited against the decision of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, regarding the belated payment of Employee’s Provident Fund (EPF) and Employee’s State Insurance (ESI) for the assessment year 2019-20.
Hisar Metal Industries Limited, based in Hisar, Haryana, contested additions made by the tax authorities for delayed payments towards employees’ PF and ESI contributions. The key issue was whether these delayed payments, made before the due date of the tax return but after the statutory deadline, should be disallowed under the Income Tax Act, 1961.
The case was heard before the Delhi Bench ‘B’ of the Income Tax Appellate Tribunal. The tribunal referenced the Supreme Court’s decision in Checkmate Services Pvt. Ltd., which set a precedent that such contributions must be made within the stipulated deadlines of the respective statutes to qualify for deductions.
The tribunal dismissed the appeals by Hisar Metal Industries Limited, upholding the decision of the CIT(A) that the belated contributions are not deductible. This decision reiterates the strict compliance required for timely statutory payments to avail tax deductions.
The tribunal’s decision emphasizes the importance of adherence to statutory deadlines for depositing employee contributions to provident fund and state insurance. This case serves as a caution to other corporations about the potential tax implications of delayed payments.
This case highlights the judiciary’s stance on maintaining strict compliance with fiscal laws to ensure fair practices and proper tax administration. It underscores the need for companies to manage their payroll and tax obligations meticulously to avoid similar legal challenges.
Hisar Metal Industries Limited vs DCIT, Circle, Hisar – Assessment Year 2019-20 Case Summary
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform